Vendor Analysis:

Huawei Technologies: Global Competitor or Paper Dragon (report)

KMI Corporation
Market Study April 2004

MWL Consulting Co., Ltd. in cooperation with KMI Research are proud to offer a profile of Huawei Technologies. Huawei Technologies (Huawei) is a telecommunications systems vendor based in Shenzhen, People's Republic of China (PRC). It develops, manufactures, and sells fixed, optical, mobile, and intelligent networking product solutions. Virtually unknown before the telecom bubble, it has become an overnight sensation in its aftermath.

Based in China - where labor is cheap, engineers are plentiful, telecom demand is still rising, local companies are favored, and intellectual property rights are (in practice) mostly nonexistent -- Huawei is now a western suppliers' worst nightmare. It has escaped an early legal battle with Cisco, exports are growing rapidly (and not just to the developing world), partnerships with foreign vendors are starting to bear fruit, and rumors are spreading about an IPO.

Huawei should be taken seriously as a potential world-class telecom supplier. However, it is hardly invincible -- in fact, it may have some fatal flaws lingering below its facade of competence.

Huawei Technologies: Global Competitor or Paper Dragon? focuses on five topic areas:

A) The Background of Huawei Technologies

B) An overview of Huawei's key product areas: access, transport, switching and routing, network management, and wireless. Includes detailed product specifications on the anchor of Huawei's SDH line, the OptiX Metro 1000

C) Analysis of the potential source of Huawei's key products, in light of the common Chinese practice of imitating (if not reverse engineering) competitors' intellectual property

D) Discussion of Huawei's R&D, partnership, and technological initiatives

E) Analysis of Huawei's competitive positioning and its financial status.

Huawei Technologies is a much-talked about but little-understood player in the global telecom market. Get the information you need to compete with Huawei, and to evaluate them intelligently, in Huawei Technologies: Global Competitor or Paper Dragon?

· Huawei's Product Portfolio

Diagram above provides a view of Huawei's product breadth.

Huawei is still small compared with international telecommunications giants such as Alcatel, Nortel and Lucent, as the table below shows. However, it is narrowing the gap.

· Key Vendors' Revenues ($M)

	1998	1999	2000	2001	2002E	2003E
Alcatel	24,720	23,023	28,646	23,117	16,111	11,716
Lucent	31,806	38,303	29,879	21,294	12,321	8,956
Nortel	17,580	21,300	28,453	17,511	10,560	8,636
Huawei	720	993	1,838	1,962	1,800*	2,500*

Source: MWL Consulting
*Estimates. 2003 sales estimate assumes that $3.8B in orders and a revenues/orders ratio of 2/3 (also used for 2002).

For full details, please email jeremyk@cmsinfo.com

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